WASHINGTON (AP) — House Republicans have put together a tax overhaul plan that would wipe out some popular tax breaks to help pay for lower overall tax rates.
The top income tax rate would drop from nearly 40 percent to 25 percent, but there would be a new 10 percent surtax on some earned income above $450,000.
The plan would repeal deductions for state and local taxes, medical expenses and moving expenses. Tax credits for child care, adoption services and energy-efficient upgrades to homes would be gone. The mortgage interest deduction would be reduced for people buying houses costing more than $500,000.
The plan has almost no chance of becoming law this year, and even House Speaker John Boehner is distancing himself from the details.
The White House is sounding more upbeat. A spokesman says there are "a couple of aspects" of the proposal that are "encouraging."
Under the plan, investment managers, big banks and owners of corporate jets would get hit with new or higher taxes, billions would be set aside for public works projects, and some wealthy business partners would no longer be able to avoid Medicare taxes.
Those are ideas championed by Obama, who would direct the new revenue toward more government spending. Republicans would use it to lower income tax rates for most families and corporations.
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